constitutional and invalid, as impairing the obligation of a con

tract.

As the constitutionality of the banking act of 1895 is very vigorously assailed in another proceeding now pending on appeal, and will have to be considered in the opinion in that case,3 we need but to say that the claim is without merit.

Order affirmed.

LUTH JAEGER v. REINERT SUNDE and Others.1

December 8, 1897.

Nos. 10,716--(141).

Pleading-Defect of Parties-Demurrer-Parties Omitted.

Under the Code, as under the old chancery practice, a demurrer for defect of parties defendant is bad if it does not, in a proper manner, point out the persons who ought to be made defendants.

Action in the district court for Hennepin county by the receiver of the insolvent Scandia Bank of Minneapolis against the stockholders of the bank to compel payment by them of sums equal to twice the par value of the stock held by each. Reinert Sunde and certain other defendants demurred to the complaint. From an order overruling their demurrer, Russell, J., they appealed. Affirmed.

Arctander & Arctander, for appellants.

Charles M. Pond, for respondent.

COLLINS, J.

Appeal from an order overruling a demurrer, general and special, to a petition or complaint filed in a proceeding instituted to enforce the liability of stockholders by a receiver of an insolvent banking corporation, appointed as such receiver under the provisions of Laws 1895, c. 145, § 20. All of the assignments of error, save the third, have been disposed of in Ueland v. Haugan, supra, page 349.

1 Reported in 73 N. W. 171. 3 See Anderson v. Seymour, infra, page 358.

The third ground of demurrer was in these words, "That there is a defect of parties defendant in said action," and the third assignment refers to this ground.

The demurrer itself was insufficient, for it should have specially pointed out what the defect was and who were the necessary parties. This was the ancient and salutary rule of chancery practice. In a demurrer for want of parties the defendant must point out the necessary parties by name or otherwise. Dias v. Bouchaud, 10 Paige, 445; Story, Eq. Pl. § 543, and note; 1 Daniell, Ch. Prac. § 584, and note. The Code has not abrogated this wholesome rule, for there is nothing in its language indicating such an intention. Baker v. Hawkins, 29 Wis. 576; Murray v. McGarigle, 69 Wis. 483, 34 N. W. 522.

The rule is enforced in Indiana. Durham v. Bischof, 47 Ind. 211; Leedy v. Nash, 67 Ind. 311. It prevailed generally in New York for many years after the adoption of the Code. Van Santvoord, Pl. 672, 714. Later there was a disposition to relax it, and to hold that a demurrer was sufficient if in the language of the statute. The rule was so just and beneficial that in 1877 it was incorporated into the Code. 7 Wait, Prac.; Code Civ. Proc. § 490.

So that under the Code, as under the old chancery practice, a demurrer for defect of parties defendant is bad if it does not in some suitable manner point out the persons who ought to be made defendants. In conclusion, we call attention to Graham v. City, 40 Minn. 436, 42 N. W. 291, in which a demurrer for defect of parties defendant was interposed. The opinion fails so to state, but an examination of the paper book shows that the able practitioner who drew the demurrer followed the rule referred to, and by name pointed out the person who should have been made a defendant. Order affirmed.

Bank-Laws 1895, c. 145-Constitution, art. 4, 27, 33; art. 9, 13—
Obligation of Contracts.

Laws 1895, c. 145 (an act entitled "An act to revise the laws relating to banks of discount and deposit"), is not unconstitutional upon the ground that it does not meet the requirements of article 9, § 13, of our state constitution, or upon the ground that it impairs the obligation of the contract between banks theretofore existing and the state, or upon the ground, if it be held applicable to such banks, that it impairs the contract obligations between its stockholders and those creditors whose claims arose prior to the day such law took effect, or upon the ground that due process of law was not provided for in insolvency proceedings against banking corporations, or upon the ground that the title of the act did not conform to article 4, § 27, or upon the ground that the act itself is in violation of article 4, § 33, of the constitution.

Same-Application to Existing Banks.

By section 29 of chapter 145, supra, the provisions thereof are made applicable to banks existing and doing business under the laws of this state at the time said statute went into effect.

Same-Insolvent Banks-Laws 1897, c. 341.

Laws 1897, c. 341, does not apply to insolvent banking corporations for which receivers have been appointed under Laws 1895, c. 145, § 20.

Same-Liability of Stockholders-G. S. 1894, 2501.

Receivers appointed under the provisions of section 20, supra, can enforce, in proper cases, the double liability imposed upon stockholders by G. S. 1894, § 2501.

Same Enforcement by Receiver-Right of Creditors under G. S. 1894, c. 76-Practice.

Where receivers of insolvent banking corporations have been appointed in accordance with the provisions of section 20, supra, they have the primarily exclusive right to institute proceedings to enforce the stockholders' liability. Creditors cannot be permitted to supersede receivers in the exercise of this right, without first showing good cause, and obtaining leave of the court in which the insolvency proceedings are pending. To this

1 Reported in 73 N. W. 171.

extent the remedies of receivers under said section 20, and those of creditors under G. S. 1894, c. 76, are concurrent. The proceeding by either is properly by supplemental complaint in the original action.

Action in the district court for Ramsey county by a creditor of the insolvent Bank of Minnesota in her own behalf and in behalf of the other creditors who should join in the action against the receivers of that bank appointed upon the petition of the bank examiner of Minnesota, and against the stockholders of the bank, to enforce the constitutional liability of the stockholders. Certain defendant stockholders demurred to the complaint. From an order sustaining the demurrers, Otis, J., plaintiff appealed. Affirmed.

Enoch Johnson and W. S. Dwinnell, for appellant.

Laws 1895, c. 145, is unconstitutional because it does not contain the requirements of Const. art. 9, § 13. At the time of the adoption of the constitution the people of Minnesota territory were just emerging from a disastrous financial panic, caused largely by the use of inflated currency by private banks. It was natural then that state banks should be demanded by the people. But their benefits would not be secured unless the constitution compelled the enactment of such safeguards as would protect their currency. The constitutional convention decided to permit state banks, but to place certain limitations upon the power of the legislature to create them. The constitution of Wisconsin compelled any general banking law to be submitted to a general vote of the people, but the constitution of Minnesota in effect prohibited the legislature from passing any other than a general banking law. Such law must regulate bank issues and be adopted by a twothirds vote of the legislature. This in effect prohibited the passage of any other than a general banking law which must regulate bank issues and must be passed by a two-thirds vote. Were the banks to be established under the general law to be passed to have the right to issue or only the right to discount and receive deposits, or were they to be banks having all these rights? If the last then the limitations on the legislature applied to laws enacted for banks of discount and deposit, as well as to laws enacted for banks of issue. Any law regarding banks of discount and deposit must conform to the requirements of Const. art. 9, § 13. If the constitution

did not contemplate that banks organized under a law embodying its restrictions should be banks of issue, why did section 13 prohibit the suspension of specie payments or require provision to be made for the security of bill holders?

If a constitutional bank may be a bank of issue, does it possess the other functions of banking as well? Suppose there were no other restrictions than those contained in the first line of section 13, art. 9, supra. The plain meaning of that line would be that a general banking law must be passed by a two-thirds vote. The word "general" must refer either to the character of the bank or the character of the law to be passed. If the word refer to the character of the bank, there can be no question as to the scope of the bank to be organized; that it must be a bank of three functions. If the word refer to the character of the law, then any banking law which is not general is prohibited by the constitution.

Is the law of 1895 a special law? If the legislature were compelled by the constitution to enact a general law along certain lines providing for banks of discount, deposit and circulation, would not a law providing for banks of discount along entirely different lines be a special act? When the nature of a subject to be legislated upon possesses three attributes, a general law pertaining thereto must make provision for all those attributes. A law which endeavors to segregate one of those attributes and make provision therefor is a special law. The only exception to this rule is where there is a reason suggesting the necessity of different legislation. State v. Cooley, 56 Minn. 540, 551. What necessity requires the classification of banks into banks of deposit and discount and banks of issue, discount and deposit? Moreover the constitution by giving to the legislature the right to pass a general law thereby prohibited it from enacting any but a general law.

Immediately after the adoption of the constitution the legislature enacted a law complying with its provisions and providing for banks of a general character and having the right of discount and deposit. Laws 1858, c. 32. A bank organized under chapter 33 of the General Statutes possesses the three functions of a bank. Dana v. Bank, 4 Minn. 293 (385). Hence the law imposed by the constitution was one authorizing banks of discount, deposit and circulation.